While no one really knows the algorithms used by the IRS in selecting returns for audits, an entity under $500,000 in total receipts does not appear to be a high priority on their radar.
Additionally, the W-2 is filed with the IRS and is then used to match with the respective individual receiving the W-2 to make sure the income is reported at the individual level.
This isn't saying the return can't be selected by the IRS to make sure reasonable wages are being paid to the S corporation shareholder's, just doesn't appear to be a priority as stated previously.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
